Asian Currencies Under Pressure As Dollar Continues To Rise
New Zealand dollar and Canadian dollar continued to move lower against the US dollar as sellers continue to gain momentum in the near term.
Japanese Merchandise Trade Balance Total released by the Ministry of Finance came in at ¥-660.7B, compared with the forecast of ¥-740.3B.
Japanese Adjusted Merchandise Trade Balance registered a reading of ¥-712.067B, compared with the last reading of ¥-925.01.
Japanese Exports of goods and services, released by Japan Customs increased by 12.9% whereas the market was expecting a rise of 11%.
Japanese Imports of goods and services increased by 1.9%, compared to the last decline of 1.7%.
German IFO business climate index will be released later today, which might cause some action in the Euro pairs.
GOLD and British pound are the ones to watch out in the near term.
The New Zealand dollar was crushed against the US dollar and fell below the 0.7500 level recently, which represented a major support area for the NZDUSD pair. There was a support trend line on the daily chart, which was breached during this past week and opened the downside move. If the pair bounces from the current levels, then it might find resistance around the 23.6% fib retracement level of the last drop from the 0.7889 high. The daily RSI is well below the 50 level, which is a bearish sign in the near term and might take the pair lower moving ahead.
Intraday Support Level – 0.7400
Intraday Resistance Level – 0.7520
Overall, as long as the pair is below the 0.7550-7600 area it might continue trading lower.
A break above the mentioned area could take the pair towards the 0.7800 level.
On the downside, the 0.7400 level can be considered as a short-term support. A break below the same might call for more downsides in the near term.
As mentioned that the Canadian dollar was one of the worst performers recently, as it traded lower against the US dollar. The USDCAD pair climbed above the 1.24 level recently and looks set for more gains in the near term. There as a trend line on the 4 hour chart, which was acting as a barrier for the US dollar buyers. However, the highlighted trend line was breached by buyers and the USDCAD pair climbed more than 200 pips higher after the break. It looks like the pair might struggle around the 1.25 level and there is a possibility of a correction in the near term. In that situation, the pair might find support around the broker trend line.
Intraday Support Level – 1.2320
Intraday Resistance Level – 1.2500
Buying dips around the 1.2300 level look like a good option.
A break below the 1.2200 level would call for more losses moving ahead.
On the upside, it would be interesting to see how the pair reacts if it reaches around the 1.2500 resistance area. A reaction is most likely and if the pair climbs above it, then more gains are likely.
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New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.
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